Two years ago, you purchase a house of $100,000. You borrow a
mortgage with 80% of LTV (loan to value ratio). The annual interest
rate on the mortgage is 6%. Payments are being made
monthly, and the loan tem is 30 years. You have found
another lender who will refinance only the current
outstanding loan balance at 4.5% with monthly payments for
30 years. The new lender will charge three discount points and the
refinancing cost is equal to $3,000....